The customary edged tool for machining is uneconomical for harder and hard to machine materials and furthermore the level of surface finish accomplished is not that great. As of late, a lot of consideration in mechanical engineering has been centered on finishing tasks. Not many investigations have been accounted for till date on the advancement of substitute magnetic abrasives. In this paper, to improve the finishing performance, the magnetic abrasives were prepared by mechanical alloying of diamond powder and iron (Fe) powder, compacting these with Universal Testing Machine (UTM) and then sintered at different temperature in a sintering machine in an inert gas (H2) atmosphere. These compacts were crushed and sieved to obtain various sizes of magnetic abrasives. These magnetic abrasives were micro-structurally examined. The results indicate that the densification increases and porosity decreases with increasing temperature. Moreover, the prepared bonded magnetic abrasives has potential performance as a new magnetic abrasives for fine finishing in Magnetic Abrasive Flow Machining (MAFM) process.